An imagined dialogueIn the spring of 2018, President Moon Jae-in marked his first anniversary in office by inviting successful entrepreneurs to the Blue House to seek their advice on the direction of his agenda to promote innovation-led growth. Moon got immersed in a conversation with Seo Jung-jin, who founded and built Korean biosimilar titan Celltrion. The 60-year-old entrepreneur pioneered the exotic realm of bioengineering 15 years earlier. His company is now is a global front-runner in biosimilar drugs, which play a similar role in the marketing and sales of biological products, which use living cells, as generics do for chemical-based drugs.
This is a fictional conversation between the two derived from Seo’s remarks in lectures and interviews.
Moon: My aspiration is to give a new growth engine to the economy through increases in incomes and innovations. But we are not getting anywhere on the innovation front.
Seo: Innovation is inventing an uncharted path. There is no direction or manual for the path. The journey can be scary and slow. But the direction will become clearer when pursued with faith in the ultimate destination. I invested in businesses with an eye on results after 10 years. We are just beginning to reap fruits. You must push ahead with the resolve that you are laying down stepping stones for the country’s future.
Moon: I am awed by your success story.
Seo: I did not study in elite schools. I am from Kunkuk University. I am not even a bio major. I was a common office worker in the Daewoo Group. When the group went under in 2000, I became jobless. I did not know what to do with myself. Then by chance, I learned that patents on many bio drugs expire in 10 years time. So I started a business. Since I took on an entirely new project, I thought I might as well aim big. I aimed for overseas markets from the beginning. I was often called a fraud. I borrowed money from loan sharks. But I was determined to see this through. We built technology one step at a time and attempted clinical trials. That is how we came to develop and market Remsima, a rheumatoid arthritis biosimilar version of infliximab, which became the first in the world to be approved by drug authorities in Europe and the United States. It now has almost 50 percent market share in the entire Euoropean market. Our cancer biosimilar Truxima is enjoying growing demand in Europe and the United States and Herzuma, a biosimilar of Roche’s breast and gastric cancer treatment Herceptin, is waiting market clearance from the United States.
Moon: What was the biggest difficulty?
Seo: Obviously, money. We were utterly shunned by local banks and institutional investors. So I turned to foreign pension funds and investment banks. In 2010, I was able to persuade Singaporean sovereign investment fund Temasek to invest.
Moon: How about our National Pension Fund? Was it not interested?
Seo: According to our shareholders’ list, the NPS has not invested in a single share in our (Kosdaq-listed) company.
Moon: The government has been encouraging the NPS to be more active in its investments in Kosdaq shares.
Seo: That would be a great boost to innovation. While we are on the subject, I would like to make another suggestion on the Kosdaq. I hope you could fix the short-selling system. Foreign brokerage houses resort to short sales (through borrowed shares) on a massive scale and profit by issuing negative reports on the stock. They reap huge profits when stock prices fall. Startups feed on dreams. They cannot grow if their dreams are defeated by short-selling.
Moon: I have been nagging about deregulation to spur innovations, but there has been little progress.
Seo: The solution is simple. Except for the basic rules to ensure fair competition, all other regulations should be lifted to clear the way for an environment where all opportunities are possible. Instead of just listening to bureaucrats, you should meet entrepreneurs to hear their needs. You should reward bureaucrats who succeeded in helping startups. Because our food and drug authority licensed our biosimilars, we were able to take them abroad.
Moon: What is your next challenge?
Seo: We want to go beyond making copycat products and develop novel bio drugs. I hope the government can give support.
JoongAng Ilbo, Dec. 1, Page 32
*The author is the head of the Economic Research Institute of the JoongAng Ilbo.